The long cycle: how the healthcare economy is changing

It’s interesting to observe how the market underestimates and overestimates the future at the same time. Most of the attention today is focused on technologies with immediate economic impact. That’s understandable: in a world where global growth remains subdued and uncertainty hasn’t gone anywhere, investors gravitate toward what can be measured here and now.

At the same time, another layer of change is unfolding in parallel. Less visible, but potentially more fundamental.

This is about the transformation of healthcare and the very nature of medicine itself.

A structural shift

The population is aging – and rapidly so. The share of people over 65 has more than doubled over the past decades and continues to rise.

With age comes a growing burden on the system: already today, more than a third of adults live with chronic conditions.

This is not a short-term trend. It is structural pressure that will intensify over the coming decades.

A paradox

On the one hand, healthcare spending is growing faster than government revenues and may reach double-digit percentages of GDP in the coming years. On the other hand, this very growth in spending has become a source of demand for innovation.

The system is getting more expensive – and, at the same time, more efficiency-driven.

Technology reshapes medicine

Technology is gradually reshaping the model of medicine itself. It’s not just about “new drugs,” but a shift toward:

• personalized approaches
• working with patient data
• integration of artificial intelligence into diagnostics and drug development

Bioengineering is one of the key areas of the next innovation cycle, especially in combination with AI. Although progress here is non-linear, of course.

Market cycle

In recent years, the sector has gone through a classic cooling phase. Capital flows have declined, IPO activity has dropped to decade lows, and investor interest has visibly weakened.

But periods like this are often transitional.

Because internally, the industry doesn’t stop: research continues, pipelines mature, and the regulatory environment becomes more predictable.

And as soon as a bit more clarity emerges, capital returns. This is already happening: expectations for new listings are improving, and investors are once again looking at companies with more advanced pipelines.

Political risks, which have weighed heavily on the sector, are partially easing. Some major players are trying to mitigate the impact of tariff policies introduced under Trump administration through agreements and localization of investments.

This doesn’t eliminate risks, but it makes them more understandable.

And for the market, that’s crucial.

If you put it all together, you get a rather rare combination

• a long-term structural driver (demographics and chronic diseases)
• a technological shift (bioengineering + data + AI)
• an industry that has already gone through repricing and cooling
• and early signs of normalization

Not obvious. Which is exactly why stories like this often remain outside the focus of the majority.

That said, these themes rarely work on their own. The environment is too complex, with too many moving parts.

More often, they are part of a broader construction, where what matters is not the individual bet, but how it fits into the system as a whole.